TORONTO — Ontario has passed legislation creating a cap-and-trade system to fight climate change, which the government predicts will add $5 a month to home heating bills and 4.3 cents to the price of a litre of gasoline, or $8 a month on average.

"The costs, according to our economists, are $13 a month, and that's before we consider any of the investments," said Environment Minister Glen Murray.

"So if you're buying an electric vehicle or home heating and cooling system or new energy systems that we'll be helping subsidize, that will lower those costs."

Under cap and trade, industries are given specific pollution limits, but can sell their emission allowances to other companies if they come in below their annual limit, or buy credits if they exceed it.